Final Expense Insurance For Young Adults

Last Updated May 25, 2024

Whether you’re purchasing your second home, or having recently entered the workforce, it’s never too early to start preparing for your future.

Some young adults may think to themselves, “Why would I need this?” or “I’m way too young for life insurance”, well we’re here to tell you that it’s actually possible to prepare for your future now! Read on to see a few tips and tricks we feel are important to share.

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Why It’s Never Too Early To Buy Life Insurance For Young Adults

Similar to a 401k, or another long-term investment profile, Life Insurance for Young Adults, as well as Final Expense Insurance for Young Adults is a great option for accruing interest early. The values associated with all Whole Life policies all contain a cash value, meaning that it’s subject to cumulative interest, as well as the possibility of early withdrawal at your discretion. 

Let’s also not forget that as a young adult purchasing life insurance, specifically a term policy, you will receive the lowest rate possible. You may effectively be able to cut your monthly premium in half compared to someone with the same qualifications but a decade or two older than you.

This may be ideal because as a young adult, expenses add up. You’re just getting your foot into the workforce and dealing with any fresh student loans or credit card payments that have gotten you to the point that you’re at, so why add expenses on top of that? We’d never recommend you to burden yourself financially, but, with how low the premium may become on top of the fact that this policy only benefits you in the long run, it could be a smart investment. 

The Two Most Common Types of Life Insurance for Young Adults

Term Life Insurance

Term Life Insurance, similar to Whole Life Insurance, contains a key takeaway when choosing between the two types. This involves the period of time in which you have the policy, where a term life insurance policy must be renewed and upheld over the term period given to you, usually 5-20 years.

This may sound like an inherent drawback to term life insurance, but the pros of this insurance type involve the generally lower price point. As a result of this lower price point, term life insurance policies usually require a medical exam. This form of insurance generally sees the most use with children and middle-aged individuals, as those that foresee unfortunate circumstances or are frequently in the hospital may wish to seek a whole life insurance option.

Whole Life Insurance

Whole Life Insurance, also known as Traditional Life Insurance or Guaranteed Life Insurance, this insurance type is sold as a policy meant to cover an individual for the remainder of their life, as long as premiums are paid accordingly.

Whole Life Insurance policies indicate a premium that is decided at the time of purchase and cannot go up due to factors such as inflation, what have you. Although Whole Life Insurance is considered the “default” insurance type, it does not indicate the only insurance type that may be “permanent”. What Whole Life Insurance does simultaneously is that it accumulates a cash value so long as the policy is in place, to which someone may use this to their benefit while accruing interest.

On top of the fact that this policy is paid regardless of circumstances, the individual upholding the policy may also withdraw these funds or adjust coverage at any time. This insurance type also usually does not require a medical exam, but rather a medical questionnaire. Due to this, the price point may be higher than other similar policies. Whole Life Insurance may include other insurance types, such as Final Expense Insurance.

Is Final Expense Insurance For Young Adults?

Final Expense Insurance is a subsection of Whole Life Insurance, in that, they behave the same way. Generally, there is no medical exam associated with these policies, and you are locked in for life so long as premiums are paid.

As a result of this fact, you can utilize this policy smoothly and stress free so long as the monthly payment isn’t a financial burden. This policy type can safely coexist with other Whole Life Insurance policies as well. You are also able to cancel these policies at any time and retrieve the values you put into them if necessary.

What is Final Expense Insurance

Final expense insurance is the type of insurance that’s in place to cover the funeral costs after your passing. This is the type of coverage that you can apply for, and once you’re approved, your family will be entitled to the payout immediately, no matter how early or late your passing might be.

While final expense coverage is generally used to cover funeral/burial costs, one may use the funds in any way desired. In this way, some brokers claim that there is essentially no difference between final expense insurance and another regular Whole Life Insurance Policy. In a way, this is true, as either way you’re relieving any potential financial burdens regardless of your coverage.

Final expense coverage usually exists as a simplified issue plan, meaning that you are approved regardless of any previous medical conditions, 99% of the time. The premiums are also generally low (depending on the condition of the applicant) and whole life, meaning that your rate does not change within the span of your lifetime. Additionally, these plans can coexist with Medicaid, depending on your total assets. If said assets are too high to qualify, one may withdraw and use these funds to purchase additional coverage or what have you, maximizing your beneficiaries’ payout.

Things to Consider When Buying Life Insurance For Young Adults

As someone buying Life Insurance for Young Adults, you are actually putting yourself in a position to maximize your growth while minimizing monthly premiums. The younger and healthier you are, generally the lower the monthly premium.

There are also additional riders and other policy modifiers you may utilize, either to mitigate any unforeseen circumstances or maybe to potentially set up your future family for success. Whatever the reason, your monthly premium will be low, and you will stretch the time in which your policy accrues interest for as long as possible, producing a greater payout.

Things to Look For When Purchasing Life Insurance as a Young Adult

First of all, how healthy you are is probably the most important concern. If you foresee yourself unable to answer a generic medical questionnaire, then this may be one of the few cases where purchasing Life Insurance for a Young Adult may not be ideal. If you are in fact young & healthy, and see yourself able to answer confidently to any potential medical questions, then you are still all clear for a policy. 

Secondly, consider current debts. Is the monthly premium feasible? Will this tip the scale? If the answer to either questions aren’t positive, then you may also might want to consider holding off until these are corrected. 

Thirdly, consider your current or future family. It’s always a good idea to put a supportive policy in place if your financial situation can handle it. As stated previously, if not a financial burden, you will benefit from this head start on a policy. 

Well, How Much Does Life Insurance For A Young Adult Cost?

Overall, not as much as you’d think. Generally as a young person, you are eligible for the lowest possible monthly premium in return for a surprising amount of coverage. Also, as someone buying Life Insurance for a Young Adult you may brace for any unforeseen circumstances in creating these policies, as they hold a cash value that may be accessed at any time. 

Company 25 y/o Male 25 y/o Female 30 y/o Male 30 y/o Female 40 y/o Male 40 y/o Female
$37
$39
$43
$46
$47
$49
$38
$42
$45
$46
$49
$51
$29
$31
$33
$36
$39
$41
$45
$48
$50
$53
$55
$59
$31
$34
$37
$39
$44
$48

These figures were obtained from the NFDA and are estimates only. For a detailed quote, please contact an agent. 

Conclusion

In conclusion, the decision to buy Life Insurance for Young Adults will usually benefit you in the long run. There’s rarely a circumstance where this isn’t an ideal play to make. In purchasing these policies in advance, you secure a safe and abundant future for you and your potential beneficiaries. 

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